The rapid run-up in Chinese shares this year is dimming the allure of another popular investment: gold. Luckily for fans of the metal, demand is looking healthy in India, the other big retail market in Asia.
The divergence between gold’s two biggest consumers is unusual. Normally, gold buyers in both countries snap up the metal when it is cheap, hoping prices will surge as they did in 2011, when gold nearly hit $2,000 an ounce. Individuals in both countries tend to sell when gold gets expensive.
This year, as gold prices have meandered around the $1,200 an ounce mark, shares have been more of a draw for Chinese investors. The Shanghai market is up 41%, while mainland Chinese investors have helped push Hong Kong shares up nearly 16%.
“Everybody wants to get on to the stock-market bandwagon,” said Victor Thianpiriya, a precious-metals analyst with Australia & New Zealand Banking Group Ltd. “It is having a big impact on jewelry demand.”
China’s gold imports may tumble by as much as 20% this year, Mr. Thianpiriya forecasts.
via Indians Buy Gold as Chinese Shift to Stocks – India Real Time – WSJ.
CHINDIA ALERT: You'll be living in their world, very soon 